LSE:SMIN

Stock Analysis Report

Executive Summary

Smiths Group plc operates as a technology company severing the medical technology, security and defense, general industrial, energy, and space and aerospace markets worldwide.

Rewards

Trading at 6.3% below its fair value

Earnings are forecast to grow 14.39% per year

Earnings grew by 19.7% over the past year

Pays a reliable dividend of 3.74%

Risk Analysis

Has a high level of debt

Dividend of 3.74% is not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Solid track record with excellent balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Smiths Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SMIN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

20.6%

SMIN

3.8%

GB Industrials

3.9%

GB Market


1 Year Return

-16.8%

SMIN

-21.7%

GB Industrials

-22.4%

GB Market

Return vs Industry: SMIN exceeded the UK Industrials industry which returned -23% over the past year.

Return vs Market: SMIN exceeded the UK Market which returned -23% over the past year.


Shareholder returns

SMINIndustryMarket
7 Day20.6%3.8%3.9%
30 Day-20.0%-17.0%-16.1%
90 Day-27.3%-32.1%-26.1%
1 Year-14.3%-16.8%-19.1%-21.7%-18.2%-22.4%
3 Year-17.1%-24.2%-27.6%-34.4%-11.7%-23.1%
5 Year25.1%7.7%1.1%-14.2%1.9%-21.5%

Price Volatility Vs. Market

How volatile is Smiths Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Smiths Group undervalued compared to its fair value and its price relative to the market?

6.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SMIN (£12.26) is trading below our estimate of fair value (£13.08)

Significantly Below Fair Value: SMIN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SMIN is poor value based on its PE Ratio (34.7x) compared to the Industrials industry average (11.6x).

PE vs Market: SMIN is poor value based on its PE Ratio (34.7x) compared to the UK market (12.4x).


Price to Earnings Growth Ratio

PEG Ratio: SMIN is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: SMIN is overvalued based on its PB Ratio (2.1x) compared to the XE Industrials industry average (0.7x).


Next Steps

Future Growth

How is Smiths Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

14.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SMIN's forecast earnings growth (14.4% per year) is above the savings rate (0.5%).

Earnings vs Market: SMIN's earnings (14.4% per year) are forecast to grow slower than the UK market (15.5% per year).

High Growth Earnings: SMIN's earnings are forecast to grow, but not significantly.

Revenue vs Market: SMIN's revenue (1.4% per year) is forecast to grow slower than the UK market (2.3% per year).

High Growth Revenue: SMIN's revenue (1.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SMIN's Return on Equity is forecast to be low in 3 years time (10.7%).


Next Steps

Past Performance

How has Smiths Group performed over the past 5 years?

2.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SMIN has high quality earnings.

Growing Profit Margin: SMIN's current net profit margins (5.6%) are higher than last year (5%).


Past Earnings Growth Analysis

Earnings Trend: SMIN's earnings have grown by 2.9% per year over the past 5 years.

Accelerating Growth: SMIN's earnings growth over the past year (19.7%) exceeds its 5-year average (2.9% per year).

Earnings vs Industry: SMIN earnings growth over the past year (19.7%) exceeded the Industrials industry 9.8%.


Return on Equity

High ROE: SMIN's Return on Equity (6%) is considered low.


Next Steps

Financial Health

How is Smiths Group's financial position?


Financial Position Analysis

Short Term Liabilities: SMIN's short term assets (£2.7B) exceed its short term liabilities (£918.0M).

Long Term Liabilities: SMIN's short term assets (£2.7B) exceed its long term liabilities (£2.0B).


Debt to Equity History and Analysis

Debt Level: SMIN's debt to equity ratio (63.4%) is considered high.

Reducing Debt: SMIN's debt to equity ratio has reduced from 80% to 63.4% over the past 5 years.

Debt Coverage: SMIN's debt is well covered by operating cash flow (22.9%).

Interest Coverage: SMIN's interest payments on its debt are well covered by EBIT (7.8x coverage).


Balance Sheet

Inventory Level: SMIN has a low level of unsold assets or inventory.

Debt Coverage by Assets: SMIN's debt is covered by short term assets (assets are 1.8x debt).


Next Steps

Dividend

What is Smiths Group's current dividend yield, its reliability and sustainability?

3.74%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SMIN's dividend (3.74%) is higher than the bottom 25% of dividend payers in the UK market (2.69%).

High Dividend: SMIN's dividend (3.74%) is low compared to the top 25% of dividend payers in the UK market (7.48%).


Stability and Growth of Payments

Stable Dividend: SMIN's dividends per share have been stable in the past 10 years.

Growing Dividend: SMIN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (129.8%), SMIN's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SMIN's dividends in 3 years are forecast to be covered by earnings (56% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Andy Smith (52yo)

4.42s

Tenure

UK£4,130,000

Compensation

Mr. Andrew Reynolds Smith, also known as Andy, has been Chief Executive and Director of Smiths Group plc since September 25, 2015. Mr. Smith served as the Chief Executive GKN Automotive at GKN plc. He serv ...


CEO Compensation Analysis

Compensation vs Market: Andy's total compensation ($USD5.14M) is above average for companies of similar size in the UK market ($USD3.41M).

Compensation vs Earnings: Andy's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Smith
Chief Executive & Executive Director4.42yrsUK£4.13m0.075% £3.6m
John Shipsey
CFO & Director2.17yrsUK£992.00k0.0063% £307.0k
Jemma Spalton
Director of Investor Relationsno datano datano data
Melanie Rowlands
Group General Counsel2.17yrsno datano data
Craig Barry
Vice President of Marketingno datano datano data
Sheena Mackay
Group HR Directorno datano datano data
Samit Basu
Chief Digital Officerno datano datano data
Keir Boxshall
Head of Innovationno datano datano data
Roland Carter
President of Smiths Detection & Asia Pacific5.42yrsno datano data
Julian David Fagge
Director of Group Strategy & M&A and CEO of Flex-Tek1.17yrsno datano data

2.2yrs

Average Tenure

Experienced Management: SMIN's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Andrew Smith
Chief Executive & Executive Director4.42yrsUK£4.13m0.075% £3.6m
John Shipsey
CFO & Director2.17yrsUK£992.00k0.0063% £307.0k
George Buckley
Independent Chairman of the Board6.25yrsUK£489.00k0.0047% £229.7k
Bruno Francois Angelici
Independent Non-Executive Director9.67yrsUK£88.00k0.00050% £24.3k
Mark Seligman
Independent Non-Executive Director3.83yrsUK£94.00k0.0013% £61.2k
Tanya Fratto
Independent Non-Executive Director7.67yrsUK£139.00k0.00038% £18.5k
Olivier Bohuon
Independent Non-Executive Director1.67yrsUK£74.00k0.00075% £36.4k
Noel Tata
Independent Non-Executive Director3.17yrsUK£143.00k0.00050% £24.3k
William Seeger
Senior Independent Director1.25yrsUK£213.00k0.0025% £122.4k
Dame Dowling
Independent Non-Executive Director1.42yrsUK£60.00k0.0015% £71.4k

3.5yrs

Average Tenure

63yo

Average Age

Experienced Board: SMIN's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SMIN insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Smiths Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Smiths Group plc
  • Ticker: SMIN
  • Exchange: LSE
  • Founded: 1851
  • Industry: Industrial Conglomerates
  • Sector: Capital Goods
  • Market Cap: UK£4.857b
  • Shares outstanding: 396.15m
  • Website: https://www.smiths.com

Number of Employees


Location

  • Smiths Group plc
  • 11-12 St James's Square
  • 4th Floor
  • London
  • Greater London
  • SW1Y 4LB
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SMGK.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1980
SMINLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1980
QS2ADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1980
SMINLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1980
QS2ABST (Boerse-Stuttgart)YesOrdinary SharesDEEURJan 1980
SMGZ.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJun 2008

Biography

Smiths Group plc operates as a technology company severing the medical technology, security and defense, general industrial, energy, and space and aerospace markets worldwide. It operates in five divisions: John Crane, Smiths Medical, Smiths Detection, Smiths Interconnect, and Flex-Tek. The John Crane division offers mechanical seals, seal support systems, hydrodynamic bearings, packing materials, power transmission couplings, and specialized filtration systems. The Smiths Medical division provides specialty medical devices and consumables, including infusion systems, vascular access products, patient airway and temperature management equipment, and specialty devices in the areas of diagnostics and emergency patient transport. It serves hospitals, surgery centers, clinics, and home care providers, as well as other medical device manufacturers. The Smiths Detection division offers sensors and systems that detect and identify explosives, narcotics, weapons, chemical agents, biohazards, and contraband. The Smiths Interconnect division provides specialized electronic and radio frequency board-level and waveguide devices, connectors, cables, test sockets, and sub-systems for applications in the security and defense, medical, general industrial, and space and aerospace markets. The Flex-Tek division offers engineered components that heat and move fluids and gases for the aerospace, medical, industrial, construction, and domestic appliance markets. The company was formerly known as Smiths Industries and changed its name to Smiths Group plc in 2000. Smiths Group plc was founded in 1851 and is headquartered in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 21:29
End of Day Share Price2020/03/31 00:00
Earnings2019/07/31
Annual Earnings2019/07/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.